# ZATARA CAPITAL SECURITIES L.P. X-17A-5 (2023-04-03) — Broker-dealer annual report - Company: ZATARA CAPITAL SECURITIES L.P. - Form: X-17A-5 - Filed: 2023-04-03 - Period: 2022-12-31 - Accession: 0001769305-23-000003 - CIK: 1769305 - File #: 8-70303 - Type: Broker-dealer - Material weakness: No - Auditor: Mercurius & Associates LLP - Auditor location: New Delhi, K7 - Contact: Scott Tarra - Phone: (949) 338-8192 - Email: mcrimbo67@gmail.com - Signed by: Michael Crimmins (CEO/CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1769305/000176930523000003/zataratannualauditreportp.pdf --- {0}------------------------------------------------ | Public Copy | | |-------------|--| | | | 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 sec file number 8-70303 # ANNUAL REPORTS FORM X-17A-5 PART III FACING PAGE | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | | |------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------|-----------------|--------------------------------------------| | FILING FOR THE PERIOD BEGINNING 01/01/2022 | | AND ENDING 12/31/2022 | | | | | MM/DD/YY | | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: Zatara Capital Securities L.P. | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
□ Check here if respondent is also an OTC derivatives dealer | ■ Broker-dealer - □ Security-based swap dealer | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 3 Corporate Plaza Drive, Suite 101 | | | | | | | (No. and Street) | | | | | Newport Beach | CA | | | 92660 | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Michael Crimmins | (314) 603-5827 | | | mcrimbo67@gmail.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Mercurius & Associates LLP | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | A-94/8 Wazirpur Industrial Area, Main Ring Road New Delhi | | | India | 110052 | | Address) | (City) | (State) | | (Zip Code) | | 02/10/2009 | | 3223 | | | | Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | | FOR OFFICIAL USE ONLY | | | | | Claims for exemption from the requirement that the annual reports be covered by the reports of an | | | | | orts of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii). if applicable CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION | Michael Crimmins -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------financial report pertaining to the firm of Zatara Capital Securities LP. a 12/31 . as of , 2 022\_\_\_ is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, a a a an arcarretary interest in any account classified solely Signature: Title: CEO and CCC # SEE ATTACHED Notary Public CALIFORNIA JURA # This filing\*\* contains (check all applicable boxes): - (a) Statement of financial condition. - = (b) Notes to consolidated statement of financial condition. - (c) Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ {g) Notes to consolidated financial statements. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (J) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240 18a-4, as applicable Exhibit A to 17 CFR 240.18a-4, as applicable. - □ {(l) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. □ {m} Information of PAB Letermination of PAB Requirements under Exhibit A to § 240. - □ (m) Information relating to possession or control reguirements for customers under 17 CFR 240.15c3-3. □ . (n). Information relating to possession or control requirements fo - □ (n) Information relating to posession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 cife Bec. as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - (q) Oath or affirmation in accordance with 17 CFR 240.17a-5. 17 CFR 240.17a-12. [] (r) Compliance roport in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as a - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-17, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial condition. CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicabon c - □ (v) Independent public accountant's report based on an examintion of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - O (z) Other: - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18c-7(d)(2), as applicable. applicable. {2}------------------------------------------------ #### CALIFORNIA JURAT # GOVERNMENT CODE § 8202 ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ A notary public or other officer completing this certificate verifies only the individual who signed the document to which this certificate in Securities only the nemity of the individual who signed (and (2) \_ State of California County of ORANGE Subscribed and sworn to (or affirmed) before me on this \_29 day of MARCY \_, 2023, by Date Month Year (1) MICHAEL CRIM MINS Name(s) of Signer(s) proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. Place Notary Seal and/or Stamp Above BRIAN YAMAMOTO Notary Public - California Orange County Commission # 2429276 Comm. Expires Dec 5, 2026 Signature a Signature of Notary Public | | OPTIONAL | |------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | Completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document. | | Description of Attached Document | | | Title or Type of Document: OATH OR AFFINMATION | | | Document Date: | Number of Pages: _____________________________________________________________________________________________________________________________________________________________ | | Signer(s) Other Than Named Above: __ | | ©2019 National Notary Association {3}------------------------------------------------ # **ZATARA CAPITAL SECURITIES LP** (A Limited Partnership) **FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PURSUANT TO RULE 17a-5(d)** **YEAR ENDED DECEMBER 31, 2022** {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # Report of the Independent Registered Public Accounting Firm To the Members of Zatara Capital Securities LP # Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Zatara Capital Securities LP (the "Company") as of December 31, 2022 and the related statements of operations, changes LP (the Peri and cash flows for the year ended and the related statellients of operations, changes in member's equity In our opinion, the financial statements present faily in all mential In our opinion, the financial statements present first to as the "financial statements"). Company as of December 31, 2022, and the results of the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the financial position of the year ended, in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements Our esponsibility is to expess registered with the Public Company Accounting Over our audit. We are public registered with the Public Communities Dasal on Our audit. Ve are a public accounting firm be independent with respect to the Comnavy in associates ("("CAOB") and are require be independent with respect to the Company in accordance ("PCAOB") and are required to applicable rules and regulations of the Securities and Excluding S. federa applicable rules and regulations of the Company in accordance With the U.S. federal secur applicable rules and regulations of the Securities and Exchange Commission a We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about when the financial statements we plan material misstatement, whether due to error or fraud, current statements are material misstatement, whether due to error or fraud. Our audit included performing are free of risks of material misstatement of the financial statoments wholes to assess th risks of material misstatement of the financial statements, whether due to assess the assess the procedures that respond to those risks Such procedures included and performin procedures that respond to the mininer statenents, weetner due to error or fraud, and performing the amounts and disclosures in the financial statements, on a test basis, evi the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting the accounting principles used and significant estimated by managements. Our audided evaluating the accounting the financial statements. We believe that our audit provide o evaluating the o the financial statements. We believe that our audit provides a reasonable basis for overal the financial statements. We believe that our audit provides a reasonable basis fo # Auditor's Report on Supplemental Information The supplementary information contained in Schedule I - Computation of Net Capital pursuant to Uniform Net Capital Rule 15c3-1 of Securities and Exchange Commission of Net Capital pursuant to Uniform Net in conjunction with the audit of Commission has been subjected to audit in conjunction with the audit of Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included information is the supplemental information recorner. as applicable and performing procedures to the underlying accounting and other records, the supplemental information. the supplemental information. ![](_page_4_Picture_11.jpeg) {5}------------------------------------------------ In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 CFR § 240.77a-5. In our onining the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. Mercurius & Associates LLP (Formerly known as AJSH & Co LLP) We have served as the Zatara Capital Securities LP's Auditor since 2020 New Delhi, India March 31, 2023 {6}------------------------------------------------ # **Zatara Capital Securities LP** (A Limited Partnership) # **TABLE OF CONTENTS** | | Page (s) | |---------------------------------------------------------|-------------| | Report of Independent Registered Public Accounting Firm | 3 -
4 | | Statement of Financial Condition | 5 | | Notes to Financial Statements | 6
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9 | | Supplemental Information: | | {7}------------------------------------------------ ## **ZATARA CAPITAL SECURITIES LP (A Limited Partnership)** # **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2022** #### **ASSETS** | Cash and cash equivalents | \$61,491 | |---------------------------------------------|----------| | Other assets | 0 | | Total
assets | \$61,491 | | LIABILITIES AND MEMBER'S EQUITY | | | LIABILITIES: | | | Current Liabilities: Accounts Payable | \$36,380 | | Total
liabilities | \$36,380 | | MEMBER'S EQUITY | 25,111 | | Total liabilities and
members'
equity | \$61,491 | {8}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2022** #### **NOTE 1 – ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES** #### **Organization and Nature of Business** Zatara Capital Securities LP (the "Company"), formerly Clear Capital Securities LP. Was formed as a California Limited Partnership on July 11, 2019, and its principal place of business is located in Newport Beach, California. The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and obtained its Financial Industry Regulatory Authority ("FINRA") license in May of 2020. The Company is regulated by FINRA. On August 19, 2021 the Company filed a Continuing Membership Application ("CMA") with FINRA to change the ownership by selling 100% of the Company's interest to new partners, with the majority interest being sold to Digital BD Markets, LLC. On February 28, 2022 FINRA granted the CMA for the change of ownership, as reflected in a new membership agreement between FINRA and the Company. Subsequently, the Company amended the Form BD to reflect the new ownership of the Company to indicate that Digital BD Markets, LLC owned 99% (as general partner) and Michael Crimmins, the CEO of Digital BD Markets, LLC, owned 1% (as limited partner). The general partner of the Company is Digital BD Markets, LLC and the sole limited partner is Michael Crimmins, as reflected in the partnership agreement as of December 31, 2021 (the "Agreement"). In accordance with the Agreement, the Company will continue in existence until dissolved by its members or it meets the limitations concerning the perpetuity of partnerships. The Company is engaged in business as a securities broker-dealer for private placements of securities as a placement agent and also provides investment and management advisory services to private companies. The Company does not hold customer funds or safekeep customer securities and is therefore exempt from SEC Rule 15c3-3. # **Basis of Presentation** The financial statements of the Company have been prepared using accounting principles generally accepted in the United States of America ("U.S. GAAP"). Financial statements prepared on a U.S. GAAP-basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. # *NOTE 2 – NET CAPITAL REQUIREMENTS* # **Cash and Cash Equivalents** The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. At December 31, 2022 the company held a single cash account, and there were no cash equivalents. {9}------------------------------------------------ #### **Fair Value of Financial Instruments** The carrying amounts of financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable approximate fair value because of their short-term maturities. ## **Income Taxes** The Company was formed as a California limited liability partnership and is taxed as a partnership under the Internal Revenue Code. In lieu of federal income taxes, the Company passes 100% of its taxable income and expenses to its partners. Therefore, no provision or liability for federal taxes is included in the financial statements. The State of California has a similar treatment, although it also imposes a provision for a variable fee based on gross California receipts in excess of \$500,000 i.e., \$2,500 annual partnership fee and minimum franchise tax of \$800. On January 2, 2018, with an effective date of December 31, 2017, the Internal Revenue Service ("IRS") issued final regulations affecting partnerships (and entities taxed as partnerships) that are intended to streamline the tax examination process and allow the IRS to collect any underpayments of tax from the Company rather than the individual partners. Under the new process, the IRS will examine partnership items in a prior year under examination and any tax adjustments will be taken into account at the partnership level in the current year when the examination is complete. The Company will pay the tax, interest, and penalties on underpayments using the highest statutory corporate or individual rate, which can be reduced under certain circumstances. The final regulations provide that partnerships can elect out of the new tax examination process if eligible. Management does not believe these changes have an effect on the Company's financial statements at and for the year ended December 31, 2022. # **Accounts Receivable** Effective January 1, 2020, the Company adopted the provision of Accounting Standards Update 2016-13, *Financial Instruments - Credit Losses (Topic 326)*, which provides revised guidance on evaluating accounts and notes receivable and other financial instruments for impairment. We record accounts receivable when products or services are delivered and it is probable that payment will be received for those products or services, and we do not record any interest or penalties on accounts receivable that are past due under the terms of the related arrangement or invoice until those amounts are received. Topic 326 requires companies to evaluate their financial instruments for impairment by recording an allowance for doubtful accounts and/or bad debt expense based on certain categories of instruments rather than a specific identification approach. The Company adopted the provisions of this standard using a method to estimate the allowance for doubtful accounts that considered both the aging of our accounts receivable and the projected loss rate of our receivables. We write off accounts receivable, and the related allowance for doubtful accounts, when it becomes remote that payment for products or services will be received. The adoption of the standard did not have a material impact on the Company's Financial Statements. # **NOTE 3 – MEMBERS' CAPITAL** The Company is a limited partnership and, as such, no limited partner shall have any personal liability to the Company, any other partner or to any creditor of the Company for the debts of the Company beyond the amount contributed by the partner to the Company. {10}------------------------------------------------ Contributions and withdrawals by partners may be made from time to time with the consent and approval of a majority interest of the members as set forth in the Agreement. Profits and losses are, in general terms, allocated to the members on a pro rata basis based on their respective membership interest. ## **NOTE 4 – RISK CONCENTRATIONS** Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. The Company places its cash and cash equivalent deposits with high quality financial institutions in the United States of America. At times during the year, cash balances may be in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limits. #### **NOTE 5 – RELATED PARTY TRANSACTIONS** Digital BD Markets, LLC, the general partner, provides office space and pays certain overhead expenses for the Company. In turn the Company pays a portion of those expenses via an expense sharing agreement. At December 31, 2022, \$27,500 is owed to CM Pacific Capital for the overhead expenses, and \$2,500 owed to another affiliate, Digital BD, Inc., a majority owner of Digital BD Markets, LLC. #### **NOTE 6 – PROVISION FOR TAXES** The State of California requires limited liability partnerships to pay an annual \$800 LLC tax plus a fee based on gross California revenue over \$250,000. The accompanying financial statements include \$800 in taxes due for 2022. #### **NOTE 7 - NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1) (the "Rule"), which, among other items, requires the maintenance of minimum net capital and the maintenance of a maximum ratio of aggregate indebtedness to net capital, both as defined by the Rule, of **15 to 1**. The Rule also restricts the timing and amounts of capital withdrawals or distribution paid. At December 31, 2022, the Company had regulatory net capital of \$25,111 which was \$20,111 above the minimum requirement of \$5,000. #### **NOTE 8 – ASU 2014-09 REVENUE FROM CONTRACTS WITH CUSTOMERS** The Company has adopted ASU 2014-09, "Revenue from Contracts with Customers" using the full retrospective approach. Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring the promised goods or services to the customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services (i.e., the "transactions price"). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of the Company's past experiences, {11}------------------------------------------------ the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of the Company's influence, such as market volatility or the judgment and actions of third parties. ASU 2014-09 does not have any material impact on the Company's financial condition or results of operations. ## **NOTE 9 – Legal Matters** The Company in the normal course of its business may be named in matters arising from its activities as a brokerdealer. In the opinion of management, there are no legal issues that arose throughout the audit period. ## **NOTE 10 – RECENT ACCOUNTING PRONOUNCEMENTS** The Financial Accounting Standards Board (the "FASB") has established the Accounting Standards Codification ("Codification" or "ASC") as the authoritative source of generally accepted accounting principles ("GAAP"). The principles embodied in the Codification are to be applied by nongovernmental entities in the preparation of f financial statements in accordance with GAAP in the United States. New accounting pronouncements are incorporated into the ASC through the issuance of Accounting Standards Updates ("ASUs"). For the year ending December 31, 2022, various ASUs were either newly issued or had effective implementation dates that would require their provisions to be reflected in the financial statements for the year then ended. The Company has reviewed the ASU releases to determine relevance to the Company's operations. There were no new recent accounting pronouncements during the year ended December 31, 2022 that we believe would have a material impact on our financial position or results of operations. ## **NOTE 11 – SUBSEQUENT EVENTS** The Company has evaluated subsequent events through March 31, 2023, the date the accompanying financial statements were issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.